The Network Effects of BitTorrent
BitTorrent (otherwise known as torrenting) is a protocol in which users can upload an download chunks of data that may be many gigabytes large. Often attributed to being for piracy, the actual concepts behind BitTorrent are quite attractive. Even though your internet service provider may offer you decent download speeds, often times the upload speeds are not as impressive. If you were trying to send a large document to a friend, or upload this to a service such as Dropbox, this can take a very long time.
The goal behind P2P (peer to peer) networking is that you can have many uploaders that contribute to perhaps a single download. Perhaps you have 5 people that have a particular file that you want to download. Instead of being throttled by the single uploader’s slow upload speed, you can leverage all the people that have this file and take from each of them particular chunks of the file. So instead of a single uploader we can now leverage the upload speeds of all 5 participants and you will have a much faster download.
The main issue that P2P networks have run into is the problem of people downloading and then never uploading (otherwise known as leechers). Leechers under the BitTorrent system are negatively affected if they simply leech and do not upload because other peers will “choke” those clients and refuse to upload files to those users. In this regard, the network sets up incentives for users to upload files so that they can benefit more themselves. The goal of BitTorrent is to hit pareto efficiency where there is no improvement that can be made without making another person worse off. By adhearing to this idea if there are 3 peers, 1 is leeching while 2 are uploading, the 2 that are uploading will end up uploading with each other because they benefit the most by helping each other and less so with the person that is leeching. If you are simply leaching you are hurting others by using other people’s upload bandwidth to your benefit to the detriment of those that could end up uploading more to others.
http://www.bittorrent.org/bittorrentecon.pdf